The Resimac Group Ltd (ASX: RMC) share price is up 1.2% today after big news for the company, as it settles a $1 billion non-conforming deal.
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Resimac shares are up 1.26% to $2.42 at the time of writing.
Resimac is a major Australian non-bank lending company, specialising in residential mortgage lending and multi-channel aspects of the distribution business, like prime and specialist lending.
Let’s take a look at what’s driving the Resimac share price today.
Resimac’s latest deals
Resimac announced the financial close of its non-conforming residential mortgage-backed securities (RMBS) transactions in the 2021 ‘Resimac Bastille Series’. This is Resimac’s second RMBS transaction for 2021 and represents 30% of its total non-conforming funding.
As Resimac group treasurer Andrew Marsden explained:
This deal supports the market-leading offering that Resimac provides to self-employed borrowers and borrowers who fall outside traditional lending guidelines.
Resimac’s growth aspirations are supported by strong demand for RMBS in the capital markets, with sound underlying credit performance as business conditions improve.
RMBS deals are bonds and can be seen as similar to tranche-based mortgage lending in the sense that the bonds are secured against a large pool of residential mortgage loans.
Specifically, they’re interest-backed debt facilities, that are financed by the interest Resimac customers pay the company on their mortgage loans. Resimac has now sealed $1 billion valued RMBS transaction deals for the past three months running.
More on Resimac’s scope
The Resimac group operates in targeted market segments and asset classes in Australia and New Zealand. Its bread and butter is home loans and was named the non-bank lender of the year in 2020. The company has more than 50,000 customers with a portfolio of home loans worth close to $13 billion and assets under management of more than $15 billion.
Resimac also has issued more than $35 billion of mortgage-backed securities in domestic and global markets since 1987 and works closely with multiple major banks.
Resimac share price snapshot
The Resimac share price has performed well over the past 12 months, lifting 190%. Its upward trajectory has slowed somewhat this year, but Resimac shares are still up 11% since the start of 2021.
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Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.